DUBAI ( Reuters ) – Saudi state oil giant Saudi Aramco has announced (SE: 2222 )On Tuesday, net profit in the first quarter of the year decreased by 25 percent, which is less than analysts’ estimates, as it was affected by the drop in crude oil prices. While the Corona Virus has cut back sharply.
Brent crude prices fell 65 Percent in the first quarter, before OPEC + producers agreed to cut supplies to a record size of 9.7 million barrels per day, starting in May, to help raise prices and curb excess supply..
Net profit fell to 62.48 billion riyals ( $ 16.64 billion ) after Zakat and tax in the quarter ended March 31 , from 83.29 billion riyals a year ago..
Analysts had expected a profit of $ 17.8 billion, according to the average estimates from the Egyptian financial group Hermes, Al-Rajhi Capital Saudi Arabia, and Arqaam Capital, based in Dubai..
Aramco said the results reflected ” low crude oil prices, as well as lower refining and chemical profit margins and inventory revaluation losses”.”.
Said Amin Nasser , chief executive of the company in a statement , ” given the remaining months of the year 2020 , we expect the pandemic corona affect the global energy demand and oil prices, which in turn will impact on the company ‘s revenues”.
Aramco kept its oil production at around 9.7 million barrels per day during the first three months of the year under the OPEC + agreement to cut supplies, before the company pumped oil to its maximum in April after talks on supply cuts collapsed in early March..
The world’s largest oil producer, which was put up on the exchange last year, said it had paid a total dividend of $ 13.4 billion in the first quarter for the last quarter of 2019. And that of $ 18.75 billion would be paid in the second quarter.
The company said that cash flow from operating activities amounted to $ 22.4 billion in the first quarter, compared to $ 24.5 billion in the same period in 2019.
The giant national oil company plans to acquire a stake in SABIC (SE: 2010 )For the Saudi petrochemical industry for about $ 70 billion, but sources told Reuters this week that the deal is likely to be restructured as oil prices drop due to the Corona virus.
Aramco said earlier on Tuesday that its planned acquisition of a 70 percent stake in SABIC was moving towards completion in the second quarter..
(The dollar = 3.7555 riyals)